Political stability reduces uncertainty 

Europe’s complex political landscape, spanning 44 countries including 27 EU member states, might appear fragmented, but this complexity delivers something invaluable: regulatory stability. Europe’s interconnected network of supranational institutions, national governments and courts inherently encourages compromise and measured decision-making. 

This framework, often criticised as cumbersome, provides investors with crucial regulatory certainty. Contrary to popular perception, European countries maintain a relatively low regulatory burden among developed nations, according to the OECD. Furthermore, European public finances remain sound, with the average EU budget deficit standing at just 3.2% in 2024—roughly half the U.S. level. 

Economic fundamentals support long-term growth 

While European economies may not lead global GDP growth rankings, factors like economic structure, institutional quality, competitive frameworks and ease of doing business drive investment performance— areas where European countries consistently excel. 

Europe’s resilience during recent challenges reinforces this strength. The energy shock and inflation spike following Russia’s invasion of Ukraine could have derailed European growth, yet the continent avoided recession while accelerating its renewable energy transition. With renewables now accounting for over 50% of EU electricity production in 2025, Europe has positioned itself for sustainable long-term prosperity. 

Current economic indicators are particularly encouraging. Economic growth is trending upward while unemployment has reached record lows. This combination creates robust fundamentals supporting real estate demand across all sectors. 

Capital flow dynamics favour European assets 

Global investors are increasingly recognising their portfolios’ European underweight, leading to notable capital reallocation. Strong year-to-date returns for European equities (STOXX 600 delivered 6.6%) and euro appreciation reflect growing demand for European assets. 

This is significant for real estate. Unlike U.S. markets where cross-border capital plays a marginal role, international flows are market-making in Europe. In major centres such as London and Paris, non-domestic buyers regularly contribute more than half of investment capital, amplifying the impact of shifting global allocation preferences.

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